Friday 19 November 2010 15.26 EST
First published on Friday 19 November 2010 15.26 EST

Leeds has had a rocky relationship with bankers; one of its most famous, William Nicholson, shot his gamekeeper dead in 1840, thinking he was a burglar in the family home at Roundhay Park.

Nonetheless, the city was picked by the government's new banking scrutineers, the Independent Commission on Banking, for their first public meeting today, to sample views on the sector's near-meltdown and the necessity for reform.

The word "people" in practice meant students, staff and alumni from Leeds University's management school, which hosted the soundings, along with businesspeople from across Yorkshire. Clare Spottiswoode, the former gas-industry regulator, chaired an expert panel, including Yorkshire Bank senior manager Douglas Campbell. He admitted feeling at home in the venue: the lecture theatre was sponsored by his firm.

Questions and comments came steadily for 90 minutes. Bank balance sheets were so opaque, said one company rescue consultant, that auditors and even regulators couldn't understand them. "Nor can some senior bank executives," agreed Howard Kew, chief executive of Financial Leeds, a consortium which feels that the City's loose ways have dragged regional business down.

Richard Robinson, from a scientific instruments manufacturer, asked whether the whole banking ethic, and business behaviour more widely, required reform, and a dose of transparency and demystification. Campbell agreed. "I came late into banking from health service management," he said, "and a lot of it was completely impenetrable." Spottiswoode did too. "It is a particularly complex and difficult industry. Transparency is the key," she said.

Other questioners related the banking industry's dodgy practices to its huge incentive structure, designed to keep on board what Kew called "some of the brightest people on the planet". Spottiswoode wondered: "How do we get incentives to work in a way which makes people behave in the best interests of society?"

Keith Taylor, a start-up adviser to small businesses, had advice: "I can take you down to Leeds market and introduce you to people who know what they are selling and its proper value. Before the crash, there were plenty of bankers who didn't know either."

People in industry were most emphatic on the need for change, such as Pramod Kumar Boyapati, who works in Bradford for French-owned mail order company PPR. "We need closer understanding between the retail sector and banks, better knowledge of one another," he said.

More answers are wanted: Edinburgh gets its roadshow on Monday, Cardiff next month and London will have two events before Christmas. The commission is also holding open its consultation period, which officially ended last week, to add to the more than 100 written submissions it has already received.